Redundancies, retrenchments, layoffs are more often the result of pressure from the Executive or Board to reduce costs than from the business having less work to do.

Reducing workforce costs through effecting layoffs is a very quick and short-term means to immediately and radically lower expenses.

However, by all means, it is not the only way.

Unquantifiable costs to a business from layoffs

What is often not understood by those looking at the ‘hard numbers’ is that by advocating layoffs, whether redundancies or retrenchments, the loss of people from your workforce has enormous implications and can weaken the business in the medium to longer term.

Before going down the layoff route, consider the following costs to the business, which are qualitative in nature and are harder to quantify than a hard-dollar payroll reduction.

Consider these examples:

the loss of corporate memory;

the loss of know-how;

the loss of capability;

the loss of morale;

the loss of productivity;

the loss of engagement;

the loss of reputation;

the loss of succession;

the loss of team cohesiveness.

Knowing this, the Human Resources leader must raise these potential losses and encourage that the leadership team looks at other ways of reducing cost and saving jobs.

Options to redundancies, retrenchments and layoffs as a strategy to reduce costs